Well, unhappy Halloween to me, to my buyer and to the poor seller of this Ballard condo that was supposed to close today, but didn’t. Financing killed this one. My client was qualified but the building ended up being the culprit. There is a large assessment on the building, which we all knew about, for a bunch of work that is going to start next month. A study was completed and an estimate for the budget has been agreed to. Most of the building, including the seller of this unit, has already paid the special assessment owed. So basically there is no worry that the money for the budget is not there. The management company is certain the money will address all the repairs. Several condominiums have sold and closed in this building already this year.
So what went wrong? My buyer is not 20% down and he is doing an FHA loan, this requiring Fannie Mae approval of his loan. Fannie Mae does not approve. Fannie Mae says that because the work is not near completion yet, one can not tell if the budget is satisfactory to correct all the issues. So how did all the other condos close in the building? Well, after some investigation into this we found couple were cash or 20% down and the one that was under 20% down was a mistake! It actually slipped through the cracks and would have never closed if the bank had gone through the proper Fannie Mae approval process.
So I’ll say it again, it’s never done until the fat lady sings… or escrow calls me with the recording numbers. It is terrible to have a deal fall through like this at the last minute but to be fair we actually knew a week ago that we may be in trouble, we just held on for a glimmer of hope.
So back to the drawing board for my client, fortunately he is like me and thinks things happen for a reason. This was just one of those crazy things that sometimes happen in real estate that takes us all by surprise.